"SOL Plunges Below $130 as FTX Unlock Looms"

Solana (SOL) Price Drops Below $130 Amidst Impending Token Unlock

Solana (SOL) has experienced a significant decline in price, falling to $126 and marking a 27% decrease over the past week. This drop brings the price to its lowest level since mid-October, as the cryptocurrency market braces for an upcoming token unlock from the FTX bankruptcy estate on March 1.

The imminent unlock of 11.2 million SOL tokens, valued at approximately $1.3 billion at current prices, has created uncertainty in the market. This release is part of the ongoing FTX bankruptcy proceedings, where the estate has been liquidating assets to repay creditors. Previous sales have seen 41 million SOL tokens distributed to prominent firms in the cryptocurrency space, placing downward pressure on Solana’s price in recent months.

The decline in price coincides with a dramatic reduction in on-chain activity. Transfer volume has plummeted from $1.99 billion in November to just $14.57 million, representing a 99% decrease in overall network activity.

Technical indicators suggest potential further downside risk for Solana. The cryptocurrency has broken below the crucial support level of $127, with the next major support zones identified at $110 and $100. The relative strength index (RSI) currently sits at 23.92, indicating oversold conditions.

The Solana DeFi ecosystem has experienced a notable cooling period. Total Value Locked (TVL) has decreased from $12 billion in mid-January to $6.8 billion as of February 28, according to data from DeFiLlama. This reduction in DeFi activity has contributed to decreased demand for SOL tokens.

Market data from Coinglass reveals a sharp decline in futures market activity. Open interest in Solana futures has dropped from $7.4 billion in mid-January to $3.7 billion on February 28, indicating a substantial reduction in leveraged trading positions.

The recent downturn in memecoin trading volume has also impacted Solana’s ecosystem. Previously, the platform had experienced high trading volumes driven by memecoin activity, but this catalyst has diminished in recent weeks.

Bollinger Bands analysis shows high levels of